Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, July 26, 1994 TAG: 9407270059
SECTION: BUSINESS PAGE: C8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
Filings in the division were up 15.2 percent in the first half of this year over mid-year 1993, according to the semi-annual report of John W.L. Craig II, clerk of the U.S. Bankruptcy Court for Western Virginia.
The court's Roanoke division covers territory from Botetourt County to the southwestern tip of Virginia.
"The other two divisions [Lynchburg and Harrisonburg] show slight decreases, but have slightly higher monthly totals in the last two months of the second quarter, indicating that the filing trend is turning around there, too," Craig wrote in his report.
"I anticipate the Lynchburg and Harrisonburg divisions being up by the end of 1994," Craig added.
Craig said bankruptcy filings are up significantly in the first six months of this year. "This upturn brings an end to a decrease in filings that commenced in 1991, and it appears that 1994 will be the third-highest year ever for bankruptcy filings in the Western District of Virginia.
He said conservative projections are that the Western District's filings will increase to almost 6,000 petitions, resulting in an increase of 8.5 percent for the year over 1993.
The trend of this increase continues to grow, Craig said, because, at the end of the first quarter, filing projections for the year hovered only at the 5,800 mark.
The first and second quarters of 1994, he said, each added up to the largest filings for any quarter in the court since the spring of 1992.
The district as a whole saw increases in filings in every chapter except family farmer bankruptcies, according to Craig. No farm plans have been filed in the district so far this year, whereas six had been entered by this time a year ago.
The percentage of liquidations has dwindled slightly as the percentage of wage-earner plans (for repayment of debt by a family or individual) has increased. Only a few years ago, he pointed out, this district had less than 12 percent of wage-earner plans; now it's up to more than 15 percent.
Each of the district's three divisions reported a decrease in the number of businesses seeking protection from creditors.
"A decrease in business filings while there is an increase in personal bankruptcies is a trend that most often interests the news media, but seldom has a ready explanation," Craig wrote.
"Those entities calling themselves businesses, or purporting to be businesses, vary widely from the filing trends over the years," Craig said. "During all of 1993, while we saw lower filings in bankruptcy, we saw business filings go up substantially."
People are borrowing too much on their credit, said Roanoke lawyer Roy V. Creasy, explaining the large increase in personal bankruptcies. For example, he said people may spend too much money on Christmas and other holidays and, three to six months later, "the world comes crashing around them."
by CNB